NEW YORK/HOUSTON, Feb 17 (Reuters) - William Cos Inc’s shares extended their surge on Wednesday, having jumped by nearly a fifth this week, narrowing the spread of the takeover offer by rival pipeline company Energy Transfer Equity LP.

The current value of Energy Transfer’s bid is about 15 percent higher than Williams’ share price as of Tuesday’s close. As recently as Friday, the spread was about 23 percent.

Williams also released its fourth-quarter results, which saw a loss of 94 cents per share, missing analyst expectations of a gain of 22 cents a share.

Williams shares jumped after fourth-quarter filings by investors showed that several hedge funds had jumped into the stock, including Jana Partners.

The spread between William’s stock price and the ETE offer had been even wider in previous weeks, and was about 27 percent as recently as Feb. 8, indicating that investors expect the deal to fall through.

Williams’ shareholders, disappointed by the deal’s lack of a hefty premium and worried about the combined company’s debt levels, gave the Energy Transfer offer a poor reception the day it was announced on Sept. 28, pushing its shares down 12 percent.

Oil prices have since fallen further, weakening the investment case for pipeline companies such as Williams and Energy Transfer, which need to increase cash flows to fund payouts to investors.

Energy Transfer’s share price has dropped about 74 percent since the offer was announced, signaling the market’s disapproval of the deal. Williams’ stock has slid 64 percent.

The total value of the cash-and-stock deal had fallen to $12.94 billion as of Tuesday close, from $33 billion in September, when the companies reached a deal, ending a pursuit stretching back to January 2015.

Investment bankers who spoke to Reuters said the deal would help Williams shoulder its exposure to pipeline contracts with heavily indebted Chesapeake Energy Corp.

A repricing of those contracts could shave $200 million to $400 million off Williams’ earnings before interest, taxes and depreciation, or EBITDA, according to analysts at Credit Suisse.

Williams’ fourth-quarter EBITDA rose 25 percent to $1.07 billion, the company said on Wednesday.

The company has said the ETE deal will enhance its growth prospects and that the board unanimously supports the closure of the transaction.

Williams shares were up 4.5 percent to $15.69 on Wednesday, while Energy Transfer shares were up about 7.6 percent at $6.52, on a day Brent crude jumped more than 7 percent. (Additional reporting by Amrutha Gayathri in Bengaluru and Michael Erman in New York; Editing by Saumyadeb Chakrabarty and Peter Cooney)